By CHARLES KUMOLU

THE journey to the current state of affairs in Nigeria’s energy sector, it was gathered, could be traced to the 2005 power sector reforms by President Olusegun Obasanjo. That reform, which came about through the enactment of Electric Power Sector Reform Bill, EPSRB, started the process of privatising PHCN.

In line with this reform, the FG  would retain transmission arm of PHCN, which would be handed over to a credible firm under a five-year contract.

The FG would also invest $3.5 billion for the construction of a 700 kilowatts super transmission grid that would enable power generation companies to transmit 6,939 Megatwatts,MW, by April 2011, when National Independent Power Generation Plants, was expected to come on stream and transmit 14,019,MW by 2013.

Consequently, PHCN was established and subsequently unbundled  into 18 successor companies. It is in  furtherance to this reform that the 2012 liquidation of the company was announced last year. “PHCN is no longer legally in existence” then Minister of Power Prof Barth Nnaji said, while confirming the liquidation of PHCN.

He further added that “the regulatory agency simply in its responsibility had instructed the market operator that the PHCN headquarters is not a market participant and should no longer get paid, they need to be transferred to where they can be useful.”

The implication is that the Federal Government would henceforth, relinquish 70 percent of its stakes in Nigeria’s electricity generation and distribution.

The government had initially planned to sell just 51 percent stake to investors who had put forward various bids for the purchase of any of the unbundled units of the PHCN, especially in distribution and generation, while it was to retain 49 per cent.

18 unbundled companies and preferred bidders: However, according to the official website of the Nigerian Electricity Regulatory Commission,NERC, http://www.nercng.org/ the successor companies  include:

Abuja Electricity Distribution Company Plc; Benin Electricity Distribution Company Plc; Enugu Electricity Distribution Company Plc; Eko Electricity Distribution Company Plc; Ibadan Electricity Distribution Company Plc and Ikeja Electricity Distribution Company Plc.

Others include the Jos Electricity Distribution Company Plc; Kaduna Electricity Distribution Company Plc; Kano Electricity Distribution Company Plc; Port Harcourt Electricity Distribution Company Plc and Yola Electricity Distribution Company Plc.

In addition, among the new successor companies are: Discos, Transyco, Neimco, Bulk purchaser, NERC and Naptin.

Currently, it was gathered that some successful preferred bidders,  last month  received their certificates after having successfully paid the statutory 25 per cent initial bid fee to commence the take-over of the companies.

Consequently, President Goodluck Jonathan handed  over state electricity assets to 15 bidding companies in  a move  described as  a milestone in a privatisation process meant to end decades of power blackouts.

It will be recalled that after the bidding process conducted by the Bureau for Public Enterprise, BPE, 15 successor companies emerged as preferred bidders including 10 Generating Companies, GenCos and five  Distribution Companies, DisCos, who paid up 25 percent the initial bid prices for which they have received certificate for; these companies are also expected to the balance of 75 percent within the next six months.

The various PHCN assets that had been successfully sold by the Bureau of Public Enterprises, BPE, include 10 distribution companies (Ikeja, Eko, Enugu, Port Harcourt, Ibadan, Yola, Jos, Abuja, Benin and Kano) and five generation companies (Shiroro hydro plant, Ughelli thermal plant, Sapele power plant, Kainji hydro plant and Geregu power plant); privatisation of Afam generating plant and Kaduna distribution company are yet to be consummated for reasons relating to alleged manipulation.

Power generation/distribution capacity:  Regardless of this, the nation is still in the darkness as VF investigation revealed that  power generation is about  3,443MW from a peak of 4,517 megawatts attained last year.

But Minister of Power Prof. Chinedu Nebo recently  said the nation is currently generating 5,228mw and distributing slightly above 4,500mw due to insufficient infrastructure.

Nebo also assured Nigerians that the Federal Government is investing heavily to boost generation through the large, medium and small hydros with total capacity of over 4,234mw.

These include Zungeru, 700mw; Mambilla, 3,050; Gurara11, 360mw; Itsi, 40mw; Small Hydro Power, 84mw. According to him: “We expect to add additional generation capacity of about 2,200MW from the National Independent Power Projects, NIPP, across the country”.

Robust transmission

Some of the projects according to him, include 1,896MWIPPs, 292MW and FGN legacy assets, 514MW before the end of 2013”

The minister said that the massive increase in generation underpins the need for a robust transmission grid. He added that the grid remains a weak link with wheeling capacity of about 4, 800MW, saying that the objective of the federal government is to achieve 10,000MW in 2014 and 20,000 in 2016.

Nebo said that a total of US3.4billion is required UP to 2016 to bring the transmission grid to evacuate all the generated power. He also said that the federal government is working out the funding of TCN long term expansion plan from the mix which will include the transmission development fund and international development banks and multilateral institutions.